Are we losing on the western front?

What’s the common thread linking these three events (a) an unemployed Berlin waitress faces loss of welfare benefits after refusing a job as a prostitute in a legal brothel; (b) a British court rules that a suspected terrorist from Algeria cannot be detained because jail gives him a “depressive illness;” (c) 17-year old Jeffrey Eden of Charlestown, R.I., receives an an “A” from his teacher and the “Silver Key” in the Rhode Island Scholastic Art Awards for a diorama titled “Bush/Hitler and How History Repeats Itself”?
To Mark Steyn the common thread is the “tolerance fetish,” and the common implication is this:

It’s an open question if the West will survive [its] twilight struggle [with radical Islam]: Europe almost certainly will not; America might. On the other hand, the psychosis to which much of the culture is in thrall may eventually reach a tipping point into mass civilizational suicide.

UPDATE: We’re told that the German prostitution story, though widely reported, is an urban legend.